Cost of capital-project yields negative npv

Assignment Help Financial Management

Reference no: EM131360817

If you have a cost of capital of 12% and your project yields a negative NPV, what can you say for certain about the project?

A) The project will have an IRR equal to 12%.

B) The project will have an IRR above 12%.

C) The project will have an IRR below 12%.

D) The project should be accepted.

Reference no: EM131360817

Questions Cloud

Balance sheet-statement of retained earning-income statement : Financial Statements are critically important in understanding the overall "financial health" of a company. All of the financial statements must be reviewed as a complete package rather than one being analyzed as a standalone statement that could giv..

What is the total rate of return on bond : Consider a bond (with par value = $1,000) paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has 3 years until maturity. a. Find the bond's price today and 6 months from now after the ne..

Determined solely by financial characteristics : A firm's business risk is determined solely by the financial characteristics of its industry. Other things held constant, which of the following events would be most likely to encourage a firm to increase the amount of debt in its capital structure?

Business impact analysis-risk communication : Define and discuss the Risk Management function and its supporting sub functions of: Risk Assessment; Business Area Analysis, Business Impact Analysis, Risk Communication; and Risk-Based Decision Making.

Cost of capital-project yields negative npv : If you have a cost of capital of 12% and your project yields a negative NPV, what can you say for certain about the project?

Identical financial and operating leverage : It is possible for Firms A and B to have identical financial and operating leverage, yet for Firm A to have more risk as measured by the variability of EPS. This would occur if Firm A has more business risk than Firm B.

Excess profits based on the analysis of historical price : Investors cannot earn excess profits based on the analysis of historical price information. We say that the financial markets are: Stock A has an expected return of 16 percent and a beta of 1.4. Stock B has an expected return of 11 percent and a beta..

What is discounted payback period if the initial investment : An investment provides the following (annual) returns (cash inflows): What is the discounted payback period if the initial investment is $2800?

What per visit price must be set for service to break even : Assume that the managers of Kaibab Hospital are setting the price on a new outpatient service. Her are relevant data estimates: What per visit price must be set for the service to break even? To earn an annual profit of $100,000? Repeat part a, but a..

User Account

All Pages